h:f:5azzad all:10F project 2014-2017

IDF GRANT FOR STRENGTHENING FINANCIAL REPORTING FRAMEWORK AND AUDIT PRACTICE

IDF GRANT NUMBER TF016566

IMPLEMENTED BY "THE INSTITUE OF CHARTERED ACCOUNTANTS OF BANGLADESH"An Autonomous Body under the Ministry of Commerce of Peoples' Republic of Bangladesh

Special Purpose Financial Statements and Independent Auditor's Report

For the period from 01 May 2014 to 30 April 2017

CONTENTS Page No.

* INDEPENDENT AUDITOR'S REPORT 1

* Statements of Project Sources and Uses of Funds 2

* Statement of Uses of Funds by project activity 3

* Notes to the project Financial Statements 4-8

K. M. HASAN & CO.Chartered Accountants

Home Town Apartment (7th, 8th & 9th Floor)

87, New Eskaton, Dhaka-1000Phone 9351457, 9351564

Fax 88-02-9345792E-mail: kmh_co@yahoo.com

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r,9T A-g AU I lonictowni Ap.irtinetits (711, 1`"'1 & 91hi Floor)Pvcjla Wod*87,n Nw lskaoRoald, McMillan Woods

K. M. HASAN & CO. Phone: 935 57, 351561,8358817 InternationalFax : 88-02-9315792 Inter nati l

a Chartered Accountants E-mail : kmibco(yalio.com Professiona'ism at lheforefront

SIN,CHS4 website: www.knliasan.com

INDEPENDENT AUDITOR'S REPORTOF

IDF GRANT FOR STRENGTHENING FINANCIAL REPORTING FRAMEWORK AND AUDIT PRACTICE

We have audited the accompanying financial statements of IDF GRANT FOR STRENGTHENING FINANCIAL REPORTING FRAMEWORKAND AUDIT PRACTICE which comprise the statement of cash receipts and payments and the statement of expenditures for the periodfrom 01 May 2014 to 30 April 2017, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management of the project is responsible for the preparation and fair presentation of these financial statements in accordance withthe cash basis of accounting described in note 2.1 to the financial statements; this includes determining that the cash basis ofaccounting is an acceptable bases for the preparation of the financial statements in the circumstance of internal control relevant tothe preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordancewith International Standards on Auditing (ISA). No Financial Reporting Framework were prescribed for preparation of the FinancialStatements that were under Audit. The Financial Statements have been prepared in form and substance following the form andsubstance that were required to be followed in respect of interim Financial Statements for the reporting of the project progress.Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. Theprocedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial

- statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity'spreparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above presents fairly, in all material respects, the funds received and expensespaid by the "IDF GRANT FOR STRENGTHENING FINANCIAL REPORTING FRAMEWORK AND AUDIT PRACTICE" project, financed under

World Bank (IDF Grant No. TF016566) for the period from 01 May 2014 to 30 April 2017 in accordance with the cash receipts and

disbursement basis as described in note 2.1 to the financial statements. We also report that all procurements of Goods and Services

were carried out in accordance with World Bank Procurement Guidelines. The present practice in respect of conditions ofProcurement Evaluation Committee for Goods and Services, the procurement decisions were duely follwed.

Basis of Accounting

We draw attention to the note 2.1 of the financial statements, which describe the basis of accounting. The financial statements are

prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the

Republic of Bangladesh. Our opinion is not modified with respect to this matter.

Place: Dhaka K. M. HASAN & CO.

Dated :19 November 2017 Chartered AccountantsAb n0

An Independent Memb er-Mi77x ofMcMillvwz oods In ternationali

IDF GRANT FOR STRENGTHENING FINANCIAL REPORTING FRAMEWORK AND AUDIT PRACTICE PROJECTIDF GRANT NUMBER TF016566

STATEMENTS OF PROJECT SOURCES AND USES OF FUNDSFor the period from 01 May 2014 to 30 April 2017

Amount in US DollarsActual Allocation Undisbursed

Reporting period _ Cumulative for balance-Particulars Notes 01May20141o 01Juty2015to 01 July 2016 to the Project Original Revised Canceled from

30 June 2015 30 June 2016 Period Grant

Opening Cash Balance 77,110.25 89,923.00Designated Account 77,110.25 89,923.00 - - - -

Add: Advances to DA Requested 3 114,608.38 50,964.39 135,809.00 301,381.77

Add: Intermediary Bank Charges recovered with Advance* 77.00 77.00

Add: Direct Payment from WB - 95,000.00 - 95,000.00 --

Add: Reimbursement 2,561.69 2,561.69 - -

Less: Charges of Intermediary Bank (59.50) (17.50) - (77.00) - -Total Fund Available 114,548.88 145,946.89 138,447.69 398,943.46 1 400,000.00 400,000.00 1,056.54Total Receipts 114,548.88 223,057.14 228,370.69 398,943.46 400,000.00 400,000.00 1,056.54Less: Uses of Funds I _I I

1 Goods 5 - - 107,320.52 107,320.52 80,920.00 1 134,490.59 27,170072. Consulting 5ervices 6 37,438.63 104,613.55 107,623.98 249,676.16 190,500,00 1 222,506.09 (27,170.07)3. Training and Workshops 7 - 28,520.59 13,426.17 41,94676 119,580.00 41,94676-

4. Audit Fees - - 9,000.00 - -

Use of Funds Total 37,438.63 133,134.14 228,370.67 398,943.44 400,000.00 398,943.44 J.,056.56

Closing Cash Balance 77,110.25 89,923.00 0.02 0.02 -

Designated Account 77,110.25 89,923.00 0.02 0.02 -

The annexed notes 1to 9 form an integral part of these special purpose project financial statements.

* The intermediary bank charge was reported as expense for which fund was received.

*The Audit fees (BDT 80,000) have been provided by ICAB.* Includes payments made during the Disbursement Grace Period 01 May to 30 August 2017 for expenses incurred within 30 April 2017.

Pro ancial Manager A ary Pr sident

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IDF GRANT FOR STRENGTHENING FINANCIAL REPORTING FRAMEWORK AND AUDIT PRACTICE PROJECTIDF GRANT NUMBER TF016566

Statement of Uses of Funds by Project Activity ( Project activity)For the period from 01 May 2014 to 30 April 2017

Amount in US Dollars

Actual Allocation Variance

Project Activities ReportingOriginal Revised Original Revised

period

Updating and implementing a reporting framework for the PSE 57,584.24 80,920.00 57,584.24 23,335.75

Strengthening Professional Education Standards 310,453.77 190,500.00 310,453.77 (119,953.77)1

Enhance Audit Quality Assurance and Monitoring System 30,905.43 119,580.00 30,905.43 88,674.57 -

Provision for Grant Audit - 9,000.00 - 9,000.0

Undisbursed balance-Canceled from Grant - - 1,056.56 - (1,056.56)

Total Financed 398,943.44 400,000.00 400,000.00 1,056.56 (1,056.56)

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IDF GRANT FOR STRENGTHENING FINANCIAL REPORTING FRAMEWORK AND AUDIT PRACTICE

IDF GRANT NUMBER TF016566

Notes to the project Financial Statements

For the period from 01 May 2014 to 30 April 2017

1. General Information

1.1. The Project

The Letter Agreement IDF Grant No. TF016566 was concluded on 01 May 2014 between the Institute of

Chartered Accountants of Bangladesh and the International Bank for Reconstruction and Development "World

Bank", according to which World Bank provided a grant from the World Bank's Industrial Development Fund (IDF)

in an amount not exceed 400,000 United States Dollars (U5D).

The Grant is provided for the financing of the "IDF GRANT FOR STRENGTHENING FINANCIAL REPORTING

FRAMEWORK AND AUDIT PRACTICE" (the project).

The Closing Date of the financing under IDF Grant No. TF016566 is set on 30 April 2017. The Grace Period for

submitting withdrawal applications for the expenditures incurred before the closing date is four months following

the Closing date i.e. 30 August 2017.

1.2. The Project objectives

The objective of the Project was to support the MOF and ICAB in strengthening the existing financial reporting

framework of public enterprises and improve the capacity of the Recipient to educate, train and regulate the

accounting profession in Bangladesh.

The Project consists of the following parts:

Part A: Updating and implementing a reporting framework for the PSE.

Part B: Strengthening Professional Education Standards.

Part C: Enhance Audit Quality Assurance and Monitoring System.

Part D: Provision for Grant Audit.

1.3. The Project Budget and Financing

The Project is being financed by IDF Grant No. TF016566.

Category Total ($)

Goods, Consultants' services, Training and 400,000,00Workshop and Audit Fees

1.4. Project Implementation

The Project is implemented by the Institute of Chartered Accountants of Bangladesh under the ministry of

commerce of Republic of Bangladesh (the ICAB) that was established in accordance with the Republic of

Bangladesh, established under the Bangladesh Chartered Accountants Order, 1973 (President's Order No. 2 of

1973).

The address of ICAB: CA Bhaban, 100 Kazl Nazrul Islam Avenue, Dhaka-1215, Bangladesh.

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2.00 Summary of significant accounting policies

2.01 Preparation and presentation of financial statement

The special purpose financial statements are prepared in accordance with the International Public Sector

Accounting Standards: Financial Reporting Under the Cash Basis of Accounting (IPSAS-Cash Basis), issued by the

International Public Sector Accounting Standards Board (IPSA5B) within the International Federation of

Accountants (IFAC), and presented in accordance with Financial Management Manual for World Bank Financed

Investment Operations.

2.02 Cash basis of accounting

Project financing is recognized as a source of project funds when the cash is received. Project expenditures are

recognized as a use of project funds when the payments are made.

2.03 Reporting Currency

The reporting currency of these special purpose financial statements is United States Dollar (USD).

2.04 Taxes

Taxes are paid in accordance with the applicable regulation of Bangladesh.

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3.00 Advances to Designated AccountAmount in US Dollars

01 May 2014 01 July 201501 July 2016 to Gross Receipt

Date Application No. to 30 June to 30 June30 April 2017 From WB

2015 201610.11.2014 ICAB-i 90,000.00 90,000.00

09-03.2015 ICAB-2 24,608.38 - - 24,608.38

02.11.2015 ICAB-3 - 50,964.39 - 50,964.39

02.11.2016 ICAB-5 5,077.00 5,077.00

11.01.2017 ICAB-6 - 46,972.25 46,972.25

25.04.2017 ICAB-7 34,182.60 34,182.60

25.04.2017 ICAB-8 - 26,402.00 26,402.00

04.05.2017 ICAB-9 - 23,175.15 23,175.15Total 114,608.38 50,964.39 135,809.00 301,381.77

4.00 Statement of Grant Account

IDF Grant No. TF016566

For the period from 01 May

2014 to 30 April 2017USD

I Expenditure paid from DA account 301,381.752 Direct Payment from WB 95,000.00

3 Reimbursement 2,561.69

4 Undishursed balance 1,056.54

5 Closing Balance (Requirement for documentation was waived) 0.02Total Project Fund 400,000.00

5.00 GoodsAmount in US Dollars

01 May 2014 01 July 2015 01 July 2016 to Cumulative as

Particulars to 30 June to 30 June 30 April 2017 at 30 April 2017

2015 2016

Project Advisor remuneration -

Video Conferencing System (VCS) - - 28,081.71 28,081.71

20 Computers purchase with - - 33,202.71 33,202.71

furniture for computer lab

Purchase of online UPS system and - - 8,051.00 8,051.00

related charges

Multifunctional Digital Copier - - 17,304.98 17,304.98

Server and storage 20,680.12 20,680.12Total - - 107,320.52 107,320.52

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6.00 Consulting ServicesAmount in US Dollars

01 May 2014 to 01 July 2015 01 July 2016 to Cumulative as

Particulars 30 June 2015 to 30 June 30 April 2017 at 30 April 2017

2016

Project Advisor remuneration 37,438.63 9,613.55 9,167.75 56,219.93

Learning Material from ICAEW - 95,000.00 5,077.00 100,077.00

Consulting Services by ICAEW - 28,600.00 28,600.00

Tailoring Study Materials - 9,480,00 9,480.00

Updating Audit Practice Manual - 4,955.00 4,955.00

Library management system & E- - 18,220.15 18,220.15

library

Audio Visual Recourses for E- - 2,371.14 2,371.14

LearningCommunication Module - 9,627.25 9,627.25

Moodle E-Learning & E-Learning - - 20,125.69 20,125.69

Management SystemTotal 37,438.63 104,613.55 107,623.98 249,676.16

7.00 Training and WorkshopAmount in US Dollars

01 May2O14 to 01 July 2015 01 July 2016 to Cumulative as

Particulars 30 June 2015 to 30 June 30 April 2017 at 30 April 2017

2016

Workshop on IPSAS - 28,520.59 - 28,520.59

Workshop on improving the current - - 5,272.41 5,272.41

reporting of PSEs

Training and workshop provided by - - 2,597.69 2,597.69

ICAEW Consultants

Expenditure for attending the SAFA - - 775.54 775.54

Conference as approved by the

World Bank TTL

Workshop on Audit Practice Manual - - 1,223.64 1,223.64

Printing of APM - 3,556.89 3,556.89Total - 28,520.59 13,426.17 41,946.76

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8.00 Reconciliation of ICAB Books and WB Records on Use of Project Funds

The use of funds or the amount disbursed on the Project as shown in the Financial Statements agreed

with World Bank records in aggregate as reflected in " Client Connections", there is some differences

between the two records in respect of category wise disbursements on 'Goods' and 'Consulting

Services' as indicated below:

Disbursement Categories ICAB Books WB Records Difference

Goods 107,320.52 134,490.59 27,170.07

Consulting Services 249,676.16 222,506.09 (27,170.07)Training and Workshops 41,946.76 41,946.76 -

Audit Fees -

Total 398,343, 44 398,343.44 (0.00)

WB records are built on documentation of Project expenditures by ICAB as submitted by ICAB through

its various Withdrawal Applications to WB from time to time. The difference comprises of (a) an

expenditure of $24,608.38 on 'Consulting Services' wrongly categorized and documented as 'Goods'

through Withdrawal Application No. ICAB-2 and (b) an expenditure of $2,561.69 on 'Consultancy

Services' wrongly categorized and documented as 'Goods' through Reimbursement Application.

However ICAB subsequently detected their wrong entry and rectified their books but WB records

remained incorrect containing the compensatory difference between the two Categories.

9.00 Project Completion

The Project was completed as on April 30, 2017 (Closing Date) and all the financial transactions were

completed as on August 30, 2017 (grace period)

As at the date of signing the special purpose financial statements:

a. No expenses related to the Project were incurred after the closing date; the payments made during the

Grace period related to expenses incurred before the Closing Date;

b. No withdrawals from IDF Grant No. TF016566 were made after Disbursement Grace Period;

c. No Expenditures related to the Project were submitted to the WB after the Reporting dates;

d. There were no uncovered prepayments or payables outstanding to contractors related to the Project as

at the Reporting Date:

e. We are not aware about any pending or existing litigations against the Project.

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